How We Finance Our Apartment Buildings

In this episode of 'Martel & Friends,' Antoine Martel breaks down his proven playbook for financing apartment buildings through his real estate fund. With over 1,500 units purchased across the Midwest in the past decade, Martel shares his strategy of relying primarily on Fannie Mae and Freddie Mac agency loans—favoring non-recourse terms, fixed interest rates between 6.0% and 6.5%, and loan-to-value ratios at or below 75%. He emphasizes the importance of long-term loan terms (5–10 years), interest-only periods for cash flow during renovations, and strong debt coverage ratios (1.25x or higher). Martel also warns against prepayment penalties and yield maintenance clauses, which can trap investors early. He highlights the value of working with consistent, high-performing brokers like Bercadia, CBRE, and Greystone, and stresses the operational efficiency of repeating the same team across deals. The episode concludes with a call to action for accredited investors to explore live deals via a link in the description. Key takeaways include: 1) Prioritize non-recourse loans to protect personal assets; 2) Use Fannie Mae and Freddie Mac for stable, long-term financing; 3) Underwrite all deals with a five-year exit strategy for consistency; 4) Build a repeatable team to streamline the process; 5) Avoid short-term, floating-rate, or recourse loans; 6) Always maintain a healthy debt service coverage ratio; 7) Use bridge loans only when necessary for distressed properties; 8) Leverage experienced brokers to save time and money. Martel’s approach is rooted in risk mitigation, operational efficiency, and disciplined underwriting.